By Connor Lynch
The Beef Farmers of Ontario (BFO) is asking its members to dig a little deeper to help boost the industry.
At last year’s annual general meeting, the BFO tried and failed to get a $1.50 increase in the provincial checkoff fee (amount paid to BFO each time an animal is sold).
The vote is back on the table this year.
The vote last year was close. Sixty-two per cent voted in favour of the increase that would have pushed the check-off to $5.50. The current check-off is $4 ($3 to the BFO and $1 to the national organization). But the BFO requires a two-thirds majority approval amongst its county representatives for a constitutional change, such as a checkoff increase. The BFO has 19,000 members.
So, the beef farmers group have called for another vote. But this time, they’ve spent the last year marketing the idea with the grassroots.
BFO president Joe Hill said that a few years back, they were hearing consistently from producers that the organization needed to be doing more to boost demand for Ontario beef. The added money is needed to launch a new marketing committee, he said.
“People weren’t ready to put more money into it,” Hill said. The BFO had put the idea together by talking with its advisory committee, made up of representatives from across the province, but hadn’t sold the grassroots on it.
The BFO is looking to partner with the Ontario Cattle Feeders Association to eliminate redundancy and push more programs like Corn-Fed beef. The goal is to push Ontario beef as a high-end product. That would boost sales and raise prices, since high-end products are more resistant to market volatility.
It’s something the BFO sees as necessary for the long-term health of Ontario’s beef industry. Ontario’s beef herd has long been in decline, and nearly half of beef that consumers are eating in Ontario is imported.
The BFO had already been working on putting the marketing committee together before last year’s failed vote. The organization decided to press ahead with it, said Hill, since the vote had been so close. The BFO doesn’t plan on hiring any new staff for the six-member committee (three from BFO and three from cattle feeders).
The marketing committee would get $1.25 of the proposed $1.50 jump in the checkoff, and likely end with an annual budget of about $1.1 million. Here’s what the marketing committee plans to do with the money:
• $175,000 for domestic market development, pushing new brands for Ontario beef and supporting existing ones
• $175,000 for global market development, focused on some of the BFO’s key export markets such as Japan
• $30,000 for cost-sharing with regional beef brands
• $50,000 for promotional materials
• $70,000 for trade missions hosting customers from key markets
• $70,000 for travel expenses
• $575,000 for staff salaries and contractors
The BFO and cattle feeders would operate at arms-length, overseeing but not “micromanaging” the committee, Hill said. It will share its business plan with the BFO, and a third party will review it after three years.
Some producers have expressed concern about what the BFO does with its money, or would do with the increase in the checkoff. The BFO includes financial statements in its annual reports.
About $3.9 million of the organization’s income, almost all of its funding, came from the checkoff. Here’s the 2017 breakdown:
• BFO spent $906,910 on salaries and benefits for its 15 staff and 2 contract employees, an average of $53,347 per employee.
• The 12-member board of directors received $230,500 in total, an average of $19,208 per director. That includes both salaries for directors as well as expenses. Each director had an average $16,628 in expenses.
• BFO earned $70,000 from its $2.7 million in investments, split between income funds like mutual funds and stock market investments.
• The BFO got $666,403 dollars in grants, largely split between funding for its northern expansion initiative and its sustainable beef production project.
Most of the money was saved by cutting back on support to outside organizations, but they also had to limit some of their marketing. Said Hill: “We still have a healthy reserve fund; we’re not financially challenged by any means. But we don’t want to draw on that any more than we have to.”
Hill said that producers have tight budgets but the checkoff increase “is an investment into the future of the industry.”
